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Smart financial planning to evade debt in 2011

By Anya Bennett

When you reveal your New Year resolution to your friends they might joke and laugh at you, as they have a fair knowledge how difficult it is to retain a resolution. But with the effect of post recession, each family over the globe has a resolution in 2011 to attain financial independence and get liberation from the clutches of debts. With the clock striking twelve people are determined to eliminate debt from their life with an effective financial planning.

In order to plan a secured financial future, you need to change your flamboyant lifestyle. Try to form a plan so that you have a steady financial goal from the beginning of the year. You can consider preparing a budget so that you can curtail your over expenditure. A proper budget planning and enrolling with a reliable debt consolidation company can revive your monetary situation.

If you are encumbered with debt these five steps can help you to restore financial situation this New Year.
1. Set a financial goal:

Focusing on a financial goal can help you to eliminate your debt promptly. Aiming at your goal can recover your financial stability with ease. Try to visualize a plan and be precise on your objective that you have set. Calculate the exact cash that is available and plan the way you intend to repay your unsecured debts.

2. Prioritize your debt that needs immediate attention:

Make a list of the obligations that you need to pay. Give priority to the debts with high annual interest rates therefore arrange it from the ascending to descending order while making a list of the pending bills. Try to exhaust your investment with low profit in order to pay off your high interest credit cards as that might save hefty cash in the long run. This might help you to save some considerable amount of money.

3. Open an automatic savings account:

If you want to resist the temptation of over expenditure when you receive the paycheck at the beginning of the month then open an automatic savings account. You can give instruction to the bank to transfer a stipulated amount from your paycheck to your savings account. If you keep on transferring a fixed amount each month from your checking account to savings account then you can manage to save huge fund at the end of the year. You can even get an annual interest on the fund in the savings account. This account can be utilized as your emergency fund as well as prevent you from taking out loans that might pave the path for debt.

4. Redundant accounts needs to be closed:

If you are planning to start afresh this year then ensure that you close your redundant accounts. Your unnecessary credit and checking accounts might compound your debt burden. You can end up splurging when you find several credit cards available in your wallet. Charges will be levied on maintaining credit and checking accounts therefore you will be wasting your money on them.

5. Make some quick cash:

Try to get some easy cash by taking up a part time job so that you can increase your income to pay off the debt. You can either lend out your garage or take a part time job to earn some extra cash. Plan out different money making techniques so that you can repay the owed amount and you can save fraction of your stable income to secure your financial future.

If you are knee deep in debt then take up the service of a debt relief program so that you can get out of your debt woes. This relief program can embalm your future monetary state. With a comprehensive financial planning you can avoid spine chilling experience of debt.

Anya Bennett
Jan 17, 2011 | 0 comments | View Post

A Common Sense Financial Plan for 2011 (Part 1)

I am not a financial planner, insurance salesman not a mortgage person. The following are just some common sense ideas I came up with by following what’s happening.

This is what I call a realistic Financial Plan for the Average Guy for 2011.

First of all, most of what you read in the “financial” columns, if you wish to read them, is not for the average person. Maybe you consider yourself the average person, but as you read them you’re probably saying, “who are they talking about?”.

At one time, we were all in the “average guys” category. But were we? The average guy at the time and even now, as  portrayed by the “esteemed financial columnists”, not only had a house, but a mostly funded 401(k), enough insurance, as well as significant cash left over.

Back when everything was going great, when  we needed cash we went to the “Giant ATM in the Sky”- in other words, we refinanced our home. Now we can’t refinance our home because we owe more that the house is worth and our debt to income is too high! As a matter of fact, some people are now having to pay PMI insurance where they never had to before.

But what do we do now, when we find out we don’t have all those things? We use our “Financial Plan for 2011”:

  1. 1. Pay your mortgage and the household bills you need to give your family it’s basic elements, first. The way most people get into trouble with their mortgage is by paying all the other bills and leaving their mortgage till last; “I can catch up later”.
  2. Once you miss your first mortgage payment, you are at the pleasure of your Lender.
  3. From the first day past the due day, they are adding late charges. If you get into the second month of arrears, your Lender may may call in the legal department. From that day forward, you are sunk. You can literally never catch up.
  4. In order to “catch up”, you must pay your current payment, plus all arrears, plus legal fees and late payments. Your $1200, one month late, can turn into $3000-3600 real fast.
Dec 28, 2010 | 0 comments | View Post